According to Gamasutra, Valve has laid off dozens of employees this morning in an attempt to adjust for its future decisions.
These cuts have affected two departments that we know of and they are in the Android and hardware development teams. Does this mean that the Steambox is no more? Of course since this just happened this morning, we will not know the specifics for some time.
The layoffs that took place this morning had nothing to do with performance issues but it does point to a refocusing of efforts from Valve. Lets just hope that they consider doing something with that Half-Life thing that they did back in the day. That was a neat game.
Valve has yet to release an official statement on this situation.